U.S. Economic Outlook: Trade Truce Offers Little Relief

A Reuters poll indicates that the U.S. economic outlook remains weak despite a temporary reduction in U.S.-China trade tensions. While the risk of recession has slightly decreased, deteriorating fiscal health and uncertain policies continue to pose significant challenges. Inflation concerns persist amidst high policy uncertainty.


Devdiscourse News Desk | Updated: 21-05-2025 18:39 IST | Created: 21-05-2025 18:39 IST
U.S. Economic Outlook: Trade Truce Offers Little Relief
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The U.S. economic outlook remains precarious, according to a recent Reuters poll of economists, despite a temporary easing of the U.S.-China trade war. The country's fiscal health hangs in the balance as Congress prepares to vote on President Trump's proposed tax-cut bill amid a sovereign credit rating downgrade by Moody's.

Economists unanimously agree that the Trump administration's policies have harmed the economy, with over half indicating significant damage. Despite recent downgrades in growth and inflation forecasts, economists held steady in May, maintaining concerns over U.S. fiscal policies and high inflation expectations.

Fed officials express growing concern over inflation resurgence due to tariff policies. The federal funds rate remains unchanged as the majority of economists foresee a potential rate cut next quarter. The economic landscape is fraught with uncertainty, driving concerns about slow growth and elevated recession risks.

(With inputs from agencies.)

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